Contracts, Transfer, and Escrow Practice Question
Question
A salesperson is explaining a concept to a client involving liquidated damages. The parties need a practical answer before moving forward. Which answer best applies the rule? (Item 69)
Answer choices
- A. Recognize agreed damages provisions subject to California requirements.
- B. It removes the need for written disclosure if the licensee believes the client already knows.
- C. It can be ignored if the transaction is expected to close quickly.
- D. It requires the licensee to favor the other party over the licensee’s own client.
Correct Answer
A. Recognize agreed damages provisions subject to California requirements.
Explanation
The correct answer is A because liquidated damages requires candidates to recognize agreed damages provisions subject to California requirements. The other options overstate the effect of custom, oral agreement, escrow, or independent salesperson action and do not reflect safe California exam practice.
Question details
- Difficulty: hard
- Domain: Contracts, Transfer, and Escrow
- Objective: liquidated damages